ASBFEO calls for Morrison government to follow-through on small business promises

ASBFEO calls for Morrison government to follow-through on small business promises

The returning Morrison government can start by responding to the review by Treasury of unfair contract term legislation, the ASBFEO has advised.

Maja Garaca Djurdjevic

May 22, 2019

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The focus on the small business sector in the lead-up to the election was a major factor in the win for the Coalition government, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, said on Tuesday.

"A Sensis report a few weeks ago showed 35 per cent of small to medium enterprises were undecided on who to vote for before the election, but they made their voice heard on the day and will expect the Coalition to act on its pre-election policy commitments," Ms Carnell said.

She advised the returning Morrison government to prioritise the Treasury's review of the unfair contract term legislation.

"ASBFEO, the Australian Competition and Consumer Commission and others have strongly recommended significant changes to the current unfair contract term legislation, backed by the Treasury report," said Ms Carnell.

"The major changes are making unfair contract terms illegal and punishable; increasing the contract size threshold to $1 million for contracts up to 12 months and $5 million for contracts greater than 12 months; and increasing the number of small businesses protected – those with a turnover of up to $10 million."

She advised that the government oblige departments to comply with unfair contract term legislation.

Ms Carnell also urged the Morrison government to re-introduce the legislation to address illegal phoenixing activity.

"Action on payment times for small businesses will lift confidence, particularly the government’s undertaking to force the country’s top 3,000 big businesses to publish payment information annually on a reporting framework," the Ombudsman said.

"We are pleased the government committed to move to pay small businesses within 20 days from 1 July and then develop a plan to introduce payment terms of five days when small businesses use e-invoicing."

With mental health a major worry for the small business community, Ms Carnell added that the government should proceed with the creation of a mental health portal specifically for business owners.

"There was a range of commitments made to small businesses during the election campaign and in the budget and we look forward to working with the government to deliver on these to ensure SMEs continue to be the ‘engine room of the economy’," she concluded.